- “We are looking at a more cautiously optimistic view for 2023,” Jeong stated.
- Retail is assumed to be a first runner; despite China’s reopening, local consumption will remain “an important driver.”
- In 2023, a potential headwind will undercut Hong Kong’s recovery.
According to one of the interviews on CNBC with Hannah Jeong, Colliers’ head of valuation and advisory services said that 2023 is the year of hope. However, in 2022, the economy was degraded to 30% due to the high mortgage interest rates, as citizens could not pay the amount.
Hong Kong is taking one step at a time, which provides them with enough to plan and implement. Explanation-
- First, the government and banks try to lower the mortgage interest rates so that citizens feel no burden paying it.
- Second, taking into retrospect China and Hong Kong’s border scene and dismantling of the COVID restrictions.
As a result, Hong Kong’s property market has chosen the path of recovery as the surroundings are favorable, and there is a high chance of scope in 2023. According to property consultancy colliers Hong Kong.
Hannah Jeong added that the retail market, in particular, will reap the “best benefit.” told CNBC’s “Squawk Box Asia” on Thursday.
Even in a favorable situation, we give some risk factor percentages. It is estimated that in the ray of hope, some potential headwinds may undercut Hong Kong’s recovery, Colliers said in its most recent report. It will include geopolitical tension and a potential global recession.
Although “we are looking at a more cautiously optimistic view for 2023,” Jeong added. Further, she stated, “There will be different uncertainties from external factors, but borders opening is surely one of the boosters for many other sectors within the property market.”
About the Retail Sector of Hong Kong
According to Colliers, the retail sector will be the “first runner” in the post-Covid recovery in 2023 with rents and prices. Especially the high street shop segment. Jeong added, “we are looking at about 8% of the retail rental performance”. In the interview with CNBC, she spoke of how rent and commercial performance will cover a higher area in the vein diagram.
She continued saying that it would be sound 25% to 30% lower than pre-Covid levels. Collier added that despite China’s reopening, local consumption would be counted as an “important driver” in the economy.
Colliers have talked about the shifting in shopping patterns of mainlanders over the last three years and have added some innovative ideas to the sentiments of the retail market. The rent performance of the office sector (Grade A office) will bounce back by 3% this year. Thanks to “pent-up demand from Chinese and overseas companies.”
Supporting the statement, Hannah Jeong said that Hong Kong’s office market has a high vacancy rate of 14.7%. We think it’s enough for a positive shift in the city’s circumstances. The peer cities hold a standard percentage of 8% to 10%.
One part of the economy is still in distress-Residential Market Demand. The hikes in borrowing costs and interest rates led to Hong Kong’s home prices plunging to a five-year low. It will result in the “softening of investment demand,” said Jeong. But, that does not impact homebuyers.
In 2023, the interest rate is likely to enhance. The Colliers are planning to stabilize the rates in the second half of this year. Last month, Hong Kong raised interest rates by 50 basis points to 4.75%. At last, a negative downward adjustment of 5% to 10% should be encountered.
- Published By Team Hongkong Journalist